Catch up with CCIQ Chief Economist on dreadful business conditions & huge budget deficits

Yesterday afternoon I caught up with CCIQ Chief Economist Dr Marcus Smith for a phone interview on the coronavirus-induced recession/mini-depression, and you can listen to the recording here:

Highlights include:

  • 3:50 – discussion of forecasts for double-digit unemployment rates in Queensland and Australia (e.g. see Pete Faulkner’s forecasts of a state unemployment rate of 12.4% by June and unemployment rates of 15-16% in the tourism-dependent regions of the Gold Coast and Cairns; note that as reported by the Weekend Australian, Treasury Secretary Steven Kennedy has told state and territory leaders that 1.5 million Australians are on the JobSeeker payment, with 900,000 claims in the last six weeks, which suggests the unemployment rate is already over 10% nationally, given there are 13.7 million in the national labour force)
  • 7:50 – discussion of JobKeeper implementation issues and whether the banks are helping with bridging finance so cash-strapped businesses can access the payment
  • 11:30 – impact on Queensland state budget, noting ANZ Research is forecasting Queensland’s state budget has deteriorated by at least $8 billion over this financial year and next, so on ANZ Research’s estimates the state government will have fiscal deficits of $8-9 billion each year in 2019-20 and 2020-21
  • 14:00 – discussion of Radical Uncertainty and the Queensland public service hiring freeze

CCIQ

CCIQ HQ on Wickham Terrace, Spring Hill, Brisbane

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2 Responses to Catch up with CCIQ Chief Economist on dreadful business conditions & huge budget deficits

  1. Glen says:

    Interesting stuff Gene, is their any break down available on each state and the effect Covid19 will have on them. It has been suggested that even though Qld is in a much worse budget position than most other states our tax mix may not leave us as badly off as many predict. NSW and Vic for example would expect to have large decreases in stamp duty as the property market subsides and both of those states have larger reliance on those sort of taxes than Qld. Also as most larger businesses in Australia are based in those two states payroll tax exemptions would weigh more heavily on those states than Qld. Do you think it’s possible that because Qld was so poorly placed going into this the fall may be less than NSW and Vic.

  2. Gene Tunny says:

    Thanks for the comment Glen. Apologies for the late reply. Yes, ANZ Research has prepared estimates for the other states. You make a good point about the tax mix but because of our industry mix the Qld economy will be hit even harder than other states. There’s no doubt it will have a massive adverse budgetary impact.

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